Tennessee Gas Pipeline Company

FIFTH REVISED VOLUME NO. 1

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Effective Date: 03/05/2009, Docket: RP09-339-000, Status: Effective

Tenth Revised Sheet No. 324 Tenth Revised Sheet No. 324

Superseding: 2nd Sub Ninth Revised Sheet No. 324

 

GENERAL TERMS AND CONDITIONS (continued)

 

(b) Upon conclusion of the Bidding Period, Transporter shall evaluate the

bids in accord with the present value formula set forth in Sections

11.6(b) and 12.6(b) for the evaluation of bids under Transporter's

capacity release mechanisms; provided that any bid rate higher than

the maximum applicable rate shall be deemed to be a bid equal to the

maximum applicable rate. For Bidders proposing a reservation rate or

other form of revenue guarantee which exceeds the maximum applicable

reservation rate during all or any portion of the term proposed by

the Bidder, the NPV calculated for the bid may not exceed an NPV that

is calculated assuming that the maximum applicable reservation rate

shall be in effect during the full term proposed by the Bidder, in

place of the reservation rate(s) or other revenue guarantee(s)

proposed by the Bidder.

 

(c) Within 5 days of the close of the Bidding Period, Transporter shall

notify Shipper of the bid having the highest present value to

Transporter ("Highest Bid"). Shipper shall have 25 days after

receiving notice to notify Transporter as to whether it will match the

Highest Bid. If the Shipper elects to match the Highest Bid it must

execute a new service agreement which contains the terms of that Bid,

which new agreement shall succeed the prior agreement following its

expiration without extension; provided however, that Shipper shall not

be required to pay any rate higher than the maximum applicable rate.

 

(d) If Transporter receives no acceptable bids on the capacity, then

Shipper may continue to receive service at the maximum rate for the

term elected by the shipper or such other rate and/or term as agreed

to by Transporter. A Shipper who continues service under such basis

shall retain its right of first refusal only if the resulting

agreement is a long term firm service agreement.

 

(e) Unless Transporter and Shipper expressly agree otherwise in Shipper's

service agreement(s), a Shipper who has entered into a limited-term

firm service agreement(s) pursuant to Article XXVIII, Section 5.8 of

these General Terms and Conditions, or a Shipper who has entered into

a limited-term firm service agreement(s) pursuant to Article XXVIII,

Section 5.11 of these General Terms and Conditions, or a Shipper who

has entered into a long term firm service agreement utilizing capacity

obtained pursuant to Article XIX of these General Terms and

Conditions, may not elect to extend such agreement pursuant to the

provisions of this Article III, Section 10.4 beyond the in-service

date of the expansion project(s) pursuant to Article XXVIII, Section

5.8, or beyond the commencement date of the future service agreement

pursuant to Article XXVIII, Section 5.11, or beyond the term of the

off-system capacity contracted for pursuant to Article XIX, as

applicable.

 

10.4.3 Prior to the expiration of the term of an Agreement(s), Transporter and

Shipper may mutually agree to renegotiate the terms of such agreement(s) in

exchange for Shipper's agreement to extend the use of at least part of its

existing service under a restructured Agreement(s). Such restructured

agreement(s) shall be negotiated on a case-by case basis in a not unduly

discriminatory manner. If an Agreement has a regulatory right-of-first

refusal, the agreement to extend must be reached prior to Transporter's

posting the capacity for bidding pursuant to Section 10.4.2(a) of these

General Terms and Conditions. To the extent that Transporter and Shipper

have mutually agreed to such an arrangement, the requirements of Article III,

Section 10.4.2 or Article XXVIII, Section 5 of these General Terms and

Conditions shall not apply.